The Interest restriction return is a feature of the corporate interest restriction rules, laying out summary details of the group and the calculation of any restriction or reactivation of interest. The return must be submitted by a nominated reporting company on behalf of the group within 12 months of the end of the return period.

Until now there has been no prescribed format for this return beyond including the relevant information specified under TIOPA 2010 Sch 7A. Alphatax accordingly presents a series of our own report statements which can be printed off for submission.

Introduction of an API

In an effort to standardise, HMRC – having previously tried an optional Excel template – have now developed a new API-based (application programming interface) submission mechanism for the corporate interest restriction regime. Rather than using the portal to upload the return as has previously been the case, taxpayers will now be able to use tax software to submit returns directly to HMRC.

The API resources published by HMRC provide a structured format for the following four submissions:

  • Full interest restriction return
  • Abbreviated interest restriction return
  • Appoint of a reporting company
  • Revoke a reporting company

Note that the use of an API would allow for a two-way flow of information, however unlike MTD for VAT, HMRC have not produced any “GET” calls that could be used by software developers to pull taxpayer details, such as return periods, from HMRC systems.

HMRC Go Live

Following consultation and testing with developers, HMRC have produced a roadmap for the introduction of the new submission mechanism.

The new service will be available to use from July 2021, running in parallel with the existing portal until April 2022 at which point HMRC intend to withdraw the portal and make the API approach mandatory.

Where are we in Alphatax?

We are working towards including full support for the API submission process in the V21.1 edition of Alphatax UK which is planned for release in Q4 2021.

We have completed a review of the schemas provided by HMRC and the contents of the full and abbreviated interest restriction return are nearly identical to the structure of the existing submission prepared by Alphatax, so there will be very little in the way of additional work required by users. A limited number of new inputs, diagnostics or validation rules will be introduced to fully comply with HMRC requirements. Some of these we already added in V20.1.

The Group module will be updated to include a new Submission menu option which will allow the relevant API return to be selected. Alphatax will then automatically generate the relevant JSON – JavaScript Object Notation, which is the file format used for the submission – file from values held within the existing Alphatax statements. This new submission mechanism is the first of its kind within the corporation tax regime, and within Alphatax. Development is ongoing but we are already able to generate JSON files for the different API returns and can validate them against HMRC’s sandbox environment.

A workflow similar to the exiting company e-filing process will guide the user through submission of the return to HMRC, with a full audit trail retained of the responses received.

Full details will be included in our Release notes for the V21.1 edition. We will update users further should anything change between now and then. Please contact our Support team should you have any questions.

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